Cost of Shipping Damage Not Passing the Sniff Test?

Downwind of some foul packaging damage piling up? Can't blame that one on the dog.

No, seriously, text us how you really feel.

It doesn't take a keen sense of smell to notice something foul when you're downwind of some serious ship... ping damage.

Have you ever had this conversation?

Because more likely than not there is going to be some major finger pointing and serious blame gaming when it comes to dealing with the inevitable stinky mess that shipping damage leaves behind.

No matter how your package actually travels to its final destination, the fact is that it will travel. And that's the part of the journey where serious damage can occur if not properly managed.

The sad truth is that when it comes to shipping, most manufacturers worry about damage right up until the pallet leaves their facility. From there, they wash their hands of the problem with the power of one simple phrase: "Ship happens."

But, there is still a long way to go before it reaches its final destination, and most of that time is spent in the most dangerous aspect of its journey: transportation.

There’s an old adage and it works for business and life: One uh-oh can wipe out a thousand atta-boys. If you value happy customers, preventing that one uh-oh can be reason enough to invest a few extra dollars into protecting your product until it safely reaches the hands of your end user.

Don't let your uh-oh become the defining factor.

Material handling accounts for a huge part of a business' total cost.

It costs money to make money. Seems weird, sure, but if you're making it and no one can get it because it's just sitting in your warehouse, then what's the point? And before that, you have to pay someone to make your widget.

So, now you've packed your skids and you're ready to send your products to market. The dollar signs just keep on dinging away:

The cost of labor when it comes to loading and unloading the trailer - $$ CHA-CHING! $$

The cost of the sheer amount of materials you’re using to try to eliminate potential damage - $$ CHA-CHING! $$

The cost of potential worker injuries because of shifted pallets or the cost of the idle time of your trucks during the loading and unloading process - $$ CHA-CHING! $$

It’s estimated that more than half to total cost of a product is just material handling. Of course, that includes receiving, inspection, storage, packaging, packing, shipping, and distribution. But that's all after you've designed, engineered, and manufactured. Who said engineers and designers are the most expensive part of the program?

Truth is that the costs of shipping and damage affect everyone: it wafts through the entire organization in a noxious cloud of direct and indirect expenses.

Managers outside of the logistics and packaging groups are largely oblivious to damage unless it directly affects their cost centers. So, why do they want to help pay for damage prevention?

Because, the truth is that the costs of shipping and damage affect everyone - wafting down through the entire organization in a noxious cloud of direct and indirect expenses.

Filing a freight claim typically takes about two hours.

One damaged pallet can take up to 30 minutes to process.

Damaged items also must be inspected and stored, taking up more time and requiring additional space.

When prorating the total costs of damaged goods storage, including property taxes, utilities, and rent or mortgage, the costs escalate.

That's not one you can blame on the dog.

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Don't let the stink of bad shipping affect your whole operation

While speedy fulfillment is important to customers, it means nothing if their orders arrive damaged…When a package fails, it usually leads to a return, and processing those returns is huge financial drain on businesses.

It costs money to pay the Customer Service Reps to process calls and emails from customers who need to return a product.

It costs money to send those return shipping labels to customers that allows them to ship the damaged products back at the expense of the company, including all transportation costs.

It costs money to store the damaged product and review it to see if there is a way to refurbish it or if it needs to be disposed. It costs money to send another product to replaced the damaged one.

Worst of all, it could possibly cost you a lifetime customer. And, there’s no way to put a price tag on an angry customer.

Packaging was never a real priority for my business until I experienced a spate of returns for one item which had unusual dimensions. The time, not to mention sales lost as a result of this, made me realize I needed to invest a bit more time looking at my packaging requirements.